Jasay on the superiority of “spontaneous conventions” over “legal frameworks” (2007)

The political economist Anthony de Jasay (1925- ) concludes that a major reason in explaining differences between nations concerning respect for property and tolerance towards others has less to do with formal “legal frameworks” which may exist than with deeper “spontaneous conventions” or social customs which have evolved over long periods of time:

Here we reach the nub of the problem of why people in some societies behave mostly well, while in others they so often misbehave. Law even at its best controls only a small part of human behavior. At its worst, it aspires to control a great part, but largely fails. Vastly more important than the legal system is the much older and more deeply rooted set of unwritten rules (technically, spontaneous conventions) barring and sanctioning torts, nuisances, and incivilities that together define what each of us is free to do and by the same token what no one is free to do to us. If these rules are kept, everyone is free, property is safe, and every two-person transaction is mutually beneficial (though third persons may be exposed to negative externalities—for the rules are no bar to competition or the general rough-and-tumble of ordinary life).

One of our many lazy mental habits is glibly to take it as read that economic activity is, and indeed must be, carried out “within a legal framework” which largely conditions how people behave. The law says that they must respect each other’s person and property, fulfil their obligations, pay their taxes, and care for their dependents. They will by and large do these things if the law is enforced. The state is there to enforce it. As rivalry in enforcement would lead to a shambles, society entrusts to the state the monopoly of law enforcement and willingly shoulders its cost. Despite occasional causes for grumbling, it is broadly agreed to be money well spent, for where would we be without the law?

The double trouble with this line of soothing tale, which nearly everybody accepts and recites, is that it is not altogether true, and that even if it were, it would fall far short of an explanation of why broadly comparable legal systems are consistent with vastly different economic behavior in different societies. To begin with, it is not even certain that the “legal framework” really acts the way imagined in standard economic and social theory. The state guards its lawmaking and enforcing monopoly with ferocious jealousy. The fact that it is an effective monopoly should lead us to expect that it will maximize some kind of net result, achieving some high degree of compliance with the law, and do so economically. In reality, because it is a monopoly subject to a popular mandate and must not arouse dread, fear, and hatred, it is restricted in what it may and what it must not do. It must produce compliance and serve up justice in white gloves on a silver platter—a demand it is most of the time quite unable to meet. It must be sensitive to shifts in public opinion between novel shades of political correctness and human-rightsism, as well as to pressures from single-issue groups and special interests. As a result, it must become a law factory, pouring out an ever broader stream of new and complex legislation. Perhaps more important, it is financed from taxes imposed on people according to criteria that have little to do with what these taxpayers, taken individually, obtain from the state by way of law enforcement services. Like any other tax-financed service where contributions are divorced from benefits, the “legal framework” is an open invitation to free-riding. Individuals will unload (or at least have a good try at unloading) onto the state responsibilities that in a well-ordered society they could and would themselves carry on their own behalf or for neighbors, partners, and peers.

Here we reach the nub of the problem of why people in some societies behave mostly well, while in others they so often misbehave. Law even at its best controls only a small part of human behavior. At its worst, it aspires to control a great part, but largely fails. Vastly more important than the legal system is the much older and more deeply rooted set of unwritten rules (technically, spontaneous conventions) barring and sanctioning torts, nuisances, and incivilities that together define what each of us is free to do and by the same token what no one is free to do to us. If these rules are kept, everyone is free, property is safe, and every two-person transaction is mutually beneficial (though third persons may be exposed to negative externalities—for the rules are no bar to competition or the general rough-and-tumble of ordinary life).

How well these rules are kept depends on how well children are brought up, on war or peace, and on other ultimate causes that are not hard to divine. The proximate cause, however, is the effectiveness of sanctions. To mete out punishment for misbehavior always involves some cost to the well behaved who take it upon themselves to administer it. He and those he cares for benefit if misbehavior is punished and hence deterred, but he would benefit even more if the punishing were done and the cost borne by someone else. Rational calculus may tell him that given the likelihood of others undertaking what he would not, his best course is to undertake it himself.

About this Quotation:

In trying to explain why countries with roughly comparable legal systems have such diversity of economic and economic arrangements, where some are prosperous and law-abiding (like many northern European nations) and others (like some Mediterranean countries) are less prosperous, Jasay comes to the conclusion that social theorists have underestimated the importance of what he calls a “much older and more deeply rooted set of unwritten rules” or what might be termed “spontaneous conventions”. These are instilled in children at a very young age by their parents and the social groups immediately around them and have much less to do with the formal legal rules which legislators have concocted in some “law factory” over recent decades. This lesson also can be applied in understanding why countries which have recently emerged from communist rule might have difficulties in adjusting to the demands of a free society, as rule by the communist party wiped out most of these unwritten rules and spontaneous conventions over decades of despotism.